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Subsidies in the WTO Framework: Types, Effects and Discussion of International Multilateral TransparencySubvenciones en el marco de la OMC: Tipos, Efectos y Discusión de la Transparencia Multilateral Internacional

November 2024

DOI:10.33324/dicere.v1i2.839

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While subsidies are a useful economic policy tool, their misuse can lead to significant negative effects. To date, the World Trade Organization (WTO) is the only global body regulating trade, addressing subsidies within its agreements. This study aims to examine the global framework of subsidies under WTO rules and discuss the issue of international transparency. A systematic literature review was conducted using the PRISMA method (2020). The main findings indicate that current WTO disciplines are insufficient to effectively address subsidies, especially in a rapidly changing global context. The study underscores the necessity for updated regulations to stay ahead in managing challenges posed by economies like China. To enhance global economic welfare, it is crucial for the WTO to adopt more robust and adaptive subsidy regulations that can respond to the evolving economic landscape.

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Cordero, S., & Pinos, L.

172

How to cite: Cordero, S., & Pinos, L. (2024). Subsidies in the WTO Framework: Types, Effects and Discussion of Inter-

national Multilateral Transparency. DICERE Revista De Derecho Y Estudios Internacionales, 1(2), 172–213. https://doi.

org/10.33324/dicere.v1i2.839

Subsidies In The WTO Framework: Types, Effects And

Discussion Of International Multilateral Transparency

Subvenciones En El Marco De La OMC: Tipos, Efectos Y Discusión

De La Transparencia Multilateral Internacional

Resumen

Abstract

Si bien las subvenciones son un instru-

mento de política económica útil, cuando

son mal utilizados pueden generar una se-

rie de efectos negativos. Hasta la fecha, la

Organización Mundial de Comercio (OMC),

es la única organización a nivel global que

se ocupa de regular el comercio; tratando

así el tema de subvenciones en el marco de

sus acuerdos. En concordancia, el principal

objetivo de esta investigación es examinar

el marco de las subvenciones a nivel glo-

While subsidies are a useful economic

policy tool, their misuse can lead to signi-

cant negative effects. To date, the World

Sofía Cordero,

Facultad de Ciencias Jurídicas, Universidad del Azuay, Cuenca, Ecuador.

Luis Pinos-Luzuriaga,

Facultad de Ciencias Jurídicas, Universidad del Azuay, Cuenca, Ecuador.

Facultad de Ciencias de la Administración, Universidad del Azuay,

Cuenca, Ecuador.

Original

DOI: https://doi.org/10.33324/dicere.v1i2.839

Recibido: 01-11-2024 Revisado: 11-11-2024 Aceptado: 25-11-2024 Publicado: 30-11-2024

bal bajo las normas de la OMC, y discutir la

cuestión de la transparencia internacional.

Para ello, se ha realizado una revisión siste-

mática de literatura por método PRISMA. Los

principales hallazgos fueron que las disci-

plinas actuales de la OMC se han quedado

cortas para hacer frente a las subvencio-

nes y la transparencia, especialmente en un

contexto global cambiante, donde la nor-

mativa debe ir a la vanguardia para hacer

frente a economías como China.

Trade Organization (WTO) is the only global

body regulating trade, addressing subsi-

dies within its agreements. This study aims

0000-0002-3894-8652 lpinos@uazuay.edu.ec

soa.cordero@es.uazuay.edu.ec

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 173

to examine the global framework of subsi-

dies under WTO rules and discuss the issue

of international transparency. A systematic

literature review was conducted using the

PRISMA method (2020). The main ndings

indicate that current WTO disciplines are

insufcient to effectively address subsidies,

especially in a rapidly changing global con-

text. The study underscores the necessity for

updated regulations to stay ahead in ma-

naging challenges posed by economies like

China. To enhance global economic welfare,

it is crucial for the WTO to adopt more robust

and adaptive subsidy regulations that can

respond to the evolving economic landsca-

pe.

Palabras clave Keywords

Subvención, Efectos, Transparencia, Acuer-

do, China Subsidies, Effects, Transparency, Agreement,

China

Introduction

In an increasingly interconnected glo-

bal economic context, subsidies have emer-

ged as a key instrument used in economic

policy. In fact, these aids were the most fre-

quent form of government intervention after

the 2008 nancial crisis, surpassing tariffs

and other non-tariff-measures. On the other

hand, to date the World Trade Organization

(WTO) is the only organization that governs

trade rules between countries, so it is res-

ponsible for regulating subsidies under its

multilateral agreements. The main agree-

ment in charge of regulating subsidies is the

Agreement on subsidies and Countervailing

Measures (ASCM), which seeks to reduce

the impact of subsidies on trade in goods.

It is important to add that when carefully

analyzing the subsidies of certain govern-

ments to specic industries, they are con-

centrated in two sectors according to the

international Standard industrial Classica-

tion: Sector A (agriculture, livestock, hunting

and shing), and sector C (manufacturing);

with China being the country that most fre-

quently uses this economic policy tool.

On the other hand, according to the

WTO (2022) it is possible to define that

“transparency is a rst step to understan-

ding the impact of subsidies on internatio-

nal trade and how to minimize their negative

effects”. Nevertheless, this issue has been

Cordero, S., & Pinos, L.

174

limited since the norms and commitments

of the organization are complex, limited

and hard to understand. Accordingly, the

28th Global Trade Report that covers the

period between 2009-2021, expressed that

the majority of subsidies are provided by

the largest trading economies so that they

can distort global markets (Evennet & Fritz,

2021). In this way, it stablishes that the main

countries (United States, China and the Eu-

ropean Union) represent more than a half of

the number of the global subsidy measures,

in a context where China has been the main

object of investigations.

Therefore, the motivation of this re-

search is to understand how subsidies work

in our current context and their possible

effects and/or contributions. In adittion,

part of this motivation is to dene how the

largest economies manage this instrument,

keeping China under the big lights. Thus, the

objective of this research is to examine the

framework of the WTO and discuss inter-

national multilateral transparency. For this

purpose, a systematic review of the literatu-

re was carried out using the PRISMA method

(Preferred Reporting Items of Systematic re-

views and Meta-Analyses) corresponding to

the year 2020 (Page et al., 2020). Thus, the

article has been divided as follows: theore-

tical framework, state of the art, methodolo-

gy, results, discussion and conclusions.

Theorical Framework

According to Singh (2017), the World Tra-

de Organization (WTO) is a trade regulatory

organization that encompasses both legal

and economic issues of the international

trade. The pillars of the WTO are its agree-

ments, which are stablished to guarantee its

members some rights in relation to trade.

These agreements also seek to stablish a

stable and transparent framework to help

exporters, importers and producers to carry

out their activities (WTO, n. d). In addition,

they limit the use of distortionary measures,

while non-distortionary measures are not

regulated (Josling & Tangermann, 1999).

Since the main function of the WTO as a

multilateral organization is to regulate trade

among its members, it works as a forum to

debate crucial issues, for example, subsi-

dies (Singh, 2017). In fact, it is worth dening

what a subsidy refers to. According to the

WTO (2006) the word subsidy is commonly

used in economics as an antonym for tax; in

other words, it is a transfer of public money

to a private sector entity.

Similarly, Van Heuvelen (2023) states

that subsidies are the transfer of resources

by a government to a national entity without

an equivalent contribution in return. In addi-

tion, it is necessary to mention that subsidies

can take different forms, for example: direct

subsidies to national companies, tax incen-

tives or favorable nancing conditions. On

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the other hand, according to the oxford dic-

tionary (n. d) a subsidy is the “Money paid by

a government or an organization to redu-

ce the costs of the services or of producing

goods; so that their prices can be kept low”.

Indeed, the main instrument of the WTO

for the regulation of subsidies is the Agree-

ment on Subsidies and Countervailing Me-

asures (ASCM); therefore, it provides several

concepts that are necessary for its legal un-

derstanding (Collins and Park, 2019). Accor-

ding to article 1 of the ASCM, the denition

of subsidy requires two elements to exist: 1)

A financial contribution by a government

or public body in the territory of a member;

2) To confer a benet. According to Steger

(2010) a financial contribution does not

constitute a subsidy if there is not a specic

benet conferred. Moreover, the ASCM does

not provide a detailed explanation of this

term.

In addition, Barbosa and Bernal (2007)

define within the framework of the ASCM

that a subsidy is “a financial contribution

from a government or any public body in

the territory of a member”, in either of the

following situations:

Within this context, the WTO specifies

that the ASCM applies not only to national

government measures, but also to those of

subnational governments and state-ow-

ned enterprises (WTO, n.d.). Moreover, the

ASCM establishes three basic categories

of subsidies: prohibited, actionable and

non-actionable. Prohibited subsidies are

those that are imposed to influence tra-

de and therefore may generate negative

effects for other countries (WTO, n.d.). In this

way, export subsidies and domestic content

subsidies are part of this category (Steger,

2010). On the other hand, actionable subsi-

dies are those that may generate “adverse

effects” to the interests of other members.

For example: damage to domestic produc-

tion, impairment of benets resulting from

the GATT and other adverse trade effects

(Steger, 2010). Also, it is worth mentioning

that most subsidies fall into this category,

as it includes categories such as subsidies

to production. The remaining subsidies are

considered non-actionable; however, they

expired in 2000 because WTO members

could not agree to extend them. In this way,

to date, no subsidy program is protected as

non-actionable (Borlini, 2023).

Subsequently, the existence of a multi-

lateral solutions system is supposed to allow

the regulation of subsidies. However, the real

difculty relies on the need of the complai-

When the practice of a government

involves a direct transfer of funds (as

grands or loans).

When public resources are condoned or

not collected (for example tax rebates).

When a government provides goods or

services, not general infrastructure, or

purchases goods.

When a government makes payments

to a nancing mechanism or commend

a private entity to realize the functions

that were mentioned in the items one

and three, which are responsibility of

the government.

Cordero, S., & Pinos, L.

176

ning member to demonstrate the adverse

effects that such subsidies have generated

(Michalek, 2004). Therefore, Hoekman and

Nelson (2020) state transparency as a fun-

damental factor for the operation of subsi-

dies in the WTO framework. In compliance,

there is also a need to have more informa-

tion about subsidies as a fundamental fac-

tor in determining its incidence throughout

the world. Consequently, it is necessary to

dene transparency.

Generally speaking, transparency can

be dened as “The degree to which informa-

tion is available to outsiders, allowing them

to have word in decisions and/or evaluate

the decisions taken” (Florinni, 2007, 5). In ad-

dition, the WTO glossary (n. d) denes trans-

parency in the trading system as “The de-

gree to which trade policies, practices, and

the process by which those are applied; are

opened and predictable. Also, it is necessary

to establish that without transparency, trade

agreements become only words on paper,

since transparency is what guarantees fair-

ness. As specied by Wolfe (2013), “for such

transparency to be guaranteed, information

must be available for the members and they

must use it.” (p.1).

Finally, transparency about subsidies

refers to the correct provision of information

about the total spending on Government

programs and market transfers, which allu-

des to how a policy is developed, implemen-

ted and enforced. Nevertheless, it is worth to

dene the objective of transparency, which

relies reduce the asymmetry between the

state, the economic actors and citizens (Ka-

rim, 2023). Similarly, information asymmetry

exacerbates power imbalances, so the WTO

strives to reduce information gaps (Wolfe,

2013, 4).

State of the Art

To date, the World Trade Organization

(WTO) is the only worldwide organization

that deals with global rules in favor of re-

gulating trade. As previously mentioned, the

main pillar of the WTO are its agreements,

which establish legal foundations for inter-

national trade and aim to create better tra-

de conditions for the countries (WTO, n. d). In

general terms, examples of this agreements

include: the agreement of rules of origin, the

general agreement on trade in services, the

safeguards agreement (WTO, n.d).

As it follows, in concordance to Lino

(2023), the current multilateral disciplines

on subsidies in the WTO are the ASCM for

non-agricultural products; the Agreement

on Agriculture for agricultural products and

the General Agreement on Trade and Ser-

vices (GATS). Nevertheless, the latter´s ne-

gotiations have not concluded yet (Lino,

2023). In addition, according to Lennan and

Switzer (2023), the ASCM is focused only on

commercial effects generated by subsidies

but it is not able to address environmental

DICERE Revista de Derecho y Estudios Internacionales

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or overcapacity issues. In this way, the ASCM

does not address all the problems genera-

ted by certain forms of subsidies, such as

sheries subsidies.

However, subsidy issues had already

been under discussion since the General

Agreement on Tariffs and Trade (GATT). For

example, Article XVI required all GATT mem-

bers to notify any subsidy that has the effect

of increasing exports or reducing imports

(Michaelek, 2004). Then, the rules of action

embodied in the GATT were redrafted in the

“rule-making agreements” of the Uruguay

Round. As a result, the new Agreement on

Subsidies and Countervailing Measures

(ASCM) emerged (Michaelek, 2004).

It is important to note that the Agree-

ment on Subsidies and Countervailing Me-

asures of 1995 established for the rst time

a denition of what a subsidy is; as well as

expanded the obligation for members to

notify their subsidies. In this regard, Article 25

of the ASCM establishes detailed conditions

and parameters for the annual notication

of any subsidy. At the same time, Article 26

of this agreement entrusts the WTO Subsi-

dies Committee with the periodic review of

these subsidy notications (Corry-Williams

& Wolfe, 2010).

In spite of that, according to the Inter-

national Monetary Fund (2022), there is still

an incomplete understanding of the advan-

tages and disadvantages of subsidies in

comparison to other policy tools, since the

veriability of national subsidy programs is

weak and scarce. Consequently, by the end

of March 2008, only 11 members had fully

complied with their notication obligations

for the period 1995-2006 (WTO, 2008). Simi-

larly, by 2019, 80 members did not make any

subsidy notications to the WTO panel, whi-

le another 11 provided a "nil notication" for

the same period (WTO, 2021). Consequently,

the subsidy balance within the GATT/WTO

framework has long been a subject of criti-

cism, especially due its proven inefciency

(Gulotty, 2022).

Thus, the 28th report of the Global Trade

Alert determined that subsidies are found

in a quarter of trade routes worldwide, with

China, the European Union and the United

States being the economies that use this

instrument the most. Currently, goods ex-

posed to subsidies from the United States

and the EU alone account for 28% of glo-

bal goods, while more than 84% of impor-

ted goods in China come from subsidized

suppliers (Evenett & Fritz, 2021). Similarly,

Hoekman and Nelson (2020) expressed that

subsidies represented more than the 52% of

all trade-related measures applied between

2009 and the end of 2019. As a result, it is

necessary to understand the current effects

and possible consequences that those sub-

sidies generate.

According to the Organization for Eco-

nomic Cooperation and Development

(OECD) subsidies can affect the cost and

revenue structure of companies and their

strategic decisions, as well as those of their

consumers. Moreover, they can affect the

structure of markets, since non-subsidized

competitors can lose market share and

even decide not be part of it. As a conse-

quence, some countries try to control sub-

sidy-driven competition that affects trade

within their borders (Robinnaru & Pop, 2014).

Cordero, S., & Pinos, L.

178

Thus, it is worth mentioning a study by

Kalouptisidi (2018) that aimed to measure

subsidies to the Chinese shipbuilding in-

dustry and quantify its impact on the global

shipbuilding industry. The study expressed

that the subsidies granted in China led to

substantial reallocation of naval production

globally. In consequence, the market shares

of China and Japan decreased, which re-

sulted in a reduction of approximately 10%

of Japan´s prots. The author also mentio-

ned that if Chinese subsidy schemes were

eliminated, its market share would decrea-

se from 49% to only 15%, while Japan would

increase by approximately 32% points. Fi-

nally, the study compared shipping prices

worldwide and found that in the absence of

China´s subsidy schemes, prices would be

about 7% higher for all other countries (Ka-

louptsidi, 2018).

On the other hand, according to Sha-

ffer et al. (2015) subsidies tend to articially

strengthen the competitiveness of the in-

dustry in which they are used, distorting tra-

de terms. For example, between 2002 to 2010

China provided a subsidy of $4.5 billion to its

naval industry, which transmitted a cost ad-

vantage to companies in the country. In this

way, the production of this industry was en-

couraged at a level that exceeded domestic

demand, so the supply was displaced to fo-

reign markets (Trefer, 2019). Consequently,

Chinese naval market share increased from

20% to 60% during this time span. Thus, sub-

sidies to China generated an asymmetry in

the terms of trade, since the cost advanta-

ge given to China was not available to any

other OECD country (Trefer, 2019).

Similarly, Van Heuvelen (2023) states

that the effects of subsidies on trade re-

lations have a great impact because they

can distort decisions on trade and invest-

ment. Furthermore, they can contribute to

the idea that trade is unfair, especially when

the benets provided by negotiations within

the framework of regional and multilateral

agreements are undermined. Finally, subsi-

dies can lead to the idea that governments

want to act unfairly, generating a similar re-

action in consequence.

Nevertheless, Collins & Park (2019) de-

ne that certain types of subsidies are not

necessarily harmful from an economic point

of view and in fact can serve social purpo-

ses, such as stimulating underdeveloped

regions. For example, in 2016 a study was

carried out on the effects and dependen-

ce generated on subsidies in Slovakia. This

analysis applied NUTS III classication to de-

termine the dependency of the whole Slovak

Republic as well as its specific regions by

using data published by the Statistical Ofce

of the Slovak Republic for the years 2009-

2013. Accordingly, agriculture in Slovakia has

undergone major chances in recent years in

terms of its importance at regional level as

well as its position in the national economy.

Thus, the study found a strong correlation

between the level of the production and the

volume of Slovakian subsidies. However,

there is also a signicant dependence of the

amount of agricultural production and the

volume of subsidies granted in the country

(KravcakovaVozarova & Kotulic, 2016).

DICERE Revista de Derecho y Estudios Internacionales

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The selected method for the following

article is a systematic literature review

(SLR), following the PRISMA (Preferred Re-

porting Items for Systematic Reviews and

Meta-Analyses) declaration of 2020. This

declaration arose to evaluate effects health

interventions, but nowadays it is also used to

evaluate social or educational interventions.

Furthermore, this method is usually carried

out in reports that include syntheses, such

as pairwise comparison meta-analysis; as

well as those that only one eligible study is

identied (Page et. Al, 2021). In this way, it is

worth mentioning the 7 stages on which this

research was based:

Thus, an exhaustive literature review

was conducted using the Scopus and Web

of Science databases with the search string

“Subsidies” and “WTO”. This search yielded

a total of 1089 and 995 articles respectively.

Articles that met the following eligibility cri-

teria were selected then. First of all, the se-

lected articles had to allude to state subsi-

dies that referred specically to the business

sector. Second, the selected document had

to cover the issue of effects or discrepancies

that subsidies generate in the international

framework, either social, economic, environ-

mental or competition effects.

At the same time, the eligible articles

had to address the issue of multilateral

transparency in terms of the WTO, either wi-

thin a general or specic framework; conse-

quently, the word “transparency” was added

to the research string. The research para-

meter was stablished only in Spanish and

English, while only articles from the period

between 2017 and 2023 were taken into ac-

count for the nal selection.

Methods

Planning: Formulation of the research

question.

Search: Detailed search of the literature

in correlation to the research question,

either in academic bases or reports

from organizations.

Selection: At this stage all documents

have been reviewed to determine those

that fulll the needed criteria.

Data extraction: At this stage the funda-

mental data that answers the research

question is extracted.

Evaluation of bias: Once that data has

been extracted, it is essential to eva-

luate the possible bias of the selected

information.

Data analysis: After evaluating the bias,

an analysis of the data collected throu-

ghout the research is carried out.

Interpretation of results: Finally, the

obtained results are interpreted. For

doing so, it is necessary to understand,

analyze and synthesize the main results

obtained.

Cordero, S., & Pinos, L.

180

Additionally, some publications and

ofcial documents from international orga-

nizations were included, such as: Organiza-

tion for Economic Cooperation and Develo-

pment, International Monetary Fund, World

Bank, etc. Thus, 63 sources were ultimately

selected, which are divided as follows: 36 ar-

ticles, three books, 15 ofcial reports and ve

web sources from the previously mentioned

organizations. Figure 1 shows the study se-

lection process:

Figure 1

PRISMA owchart

Source:

Adapted from

Page et. Al (2022)

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 181

It is necessary to mention that a large

part of the subsidies that the countries have

granted to their industries are focused on

agriculture, livestock, hunting and fishing

(sector A), manufacturing (sector C), and a

few studies in the public administration and

defense (sector O). The coding of industries

is indeed based on the International Stan-

dard Industrial Classication (ISIC).

Finally, the annexes are shown in the

following URL: https://drive.google.com/dri-

ve/u/0/folders/1HAuzj-Z08pRDllsGwNoDZ-

7TkBJEyY7Hp

Within the rst part of the results, natio-

nal and foreign effects of subsidies throu-

gh different economic sectors are shown,

according to the sector that they belong

to. For this purpose, the classication was

based on the International Standards In-

Results

dustrial Classication (ISIC). Table 1 shows

the effects corresponding to sector A, which

refers to Agriculture, Livestock, Forestry and

Fisheries. It should be noted the effects are

focused only on the agriculture and sheries

subsectors.

Sector Subsector Country Impact

Production Competence Markets Prices Ambiental Social Polítics Description

A01 Corn China X Trade

Disputes

A01 Cotton China X

Price

Increase

(when

subsidies

are

withdrawn)

A01 N/D European

Union XUse of dis-

tortionary

politics

A01

Wheat,

Corn,

Rice and

Cotton

China X X

Increase of

the global

share,

lower glo-

bal prices

A031 Fisheries China X X X Overca-

pacity and

overshing

Table 1

Effects of subsidies in sector A: Agriculture, Livestock, Forestry and Fisheries

Cordero, S., & Pinos, L.

182

Sector Subsector Country Impact

Production Competence Markets Prices Ambiental Social Polítics Description

A031 Fisheries Asiatic

countries XDamage to

sh stocks

A031 Fisheries

European

commu-

nities and

the USA

X X Overca-

pacity and

overshing

A031 Fisheries China X Trade

Disputes

A031 Fisheries N/D X Market

imbalan-

ces

A031 Fisheries The USA X X Overca-

pacity and

overshing

A031 Fisheries 143 mem-

bers of

the WTO X X Overca-

pacity and

overshing

Source: Adapted from the authors.

As it can be noted, table 1 shows the

effects generated by subsidies within the

sector A. In fact, the most subsidizing eco-

nomies to this sector in 2016 were China, the

United States and the European Union with

amounts of $212,000 million, 100,000 million

and 33,000 million respectively. Similarly, it

was determined that for that period, China

allocated 2.4% of its GDP towards agricultu-

ral subsidies, four times more than the rest

of the OECD countries (OECD, 2017). A new

report from the OECD (2023) stablished that

subsidies reached $851 billion from 2020 to

2022, where China represents 36% of the to-

tal. At the same time, India, the United States

and the EU, represent 15%, 14% and 13% res-

pectively (OECD, 2023). At the same time,

table 1 listed some effects on production,

competition and prices; as well as political

and environmental effects that are hitting

the industry.

5.1 Agricultural Subsidies

Wang et al. (2022) framed the effects

of production, income and environmental

subsidies in China. According to the authors,

subsidies have such a positive effect on co-

tton production, as well as on the income of

cotton farmers. Thus, reducing subsidies to

the cotton sector by 8,5% would generate a

reduction of 70% of production, along with

a 20% reduction of the protability of local

farmers. Additionally, subsidies to this sector

have a lot of inuence on environmental is-

sues since it increases the use of machinery,

fertilizers, etc.

On the other hand, Hopewell (2019)

established that subsidies on agricultural

products articially boost production, since

they reduce production costs. According

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 183

to the author, state aid to the agricultural

sector in China represented 38% of gross

income in the wheat industry, 29% of corn,

32% of rice and 49% of sugar. This articial

boost increased exports due to the existing

supply, resulting in China's global market

share rising from 18% between 1995 and 1997

to 43% between 2014 and 2016. Within this

context, the artificial boost to agricultural

production in China results in a decrease in

import demand from subsidized economies

and in lower world price. In turn, this affects

other agricultural producers and exporters

worldwide (Gale, 2013; Mera, 2017; Rabobank,

2016).

Consequently, a request was made wi-

thin the forum of the WTO to verify the Chi-

nese subsidy programs for corn, rice, cotton

and wheat, since they were apparently dis-

torting the prices of the US after a displace-

ment in the supply. However, the offending

measure was withdrawn by China before

the WTO interfered in the dispute (Gulotty,

2022).

5.2 Fisheries subsidies

Continuing with the analysis of Table 1,

it will now focus on sector A031 or “sheries

subsector”. In general terms, the findings

showed that subsidies generate strong

effects on markets, but also on the environ-

ment and production. According to Monte-

mayor et. al (2020), sheries subsidies are

divided in three categories: benecial, am-

biguous and harmful. In this way, benecial

subsidies can be considered investments

in promoting the conservation of fishery

resources; while ambiguous subsidies can

lead to sustainable management or ove-

rexploitation of resources depending on how

they are used (Sumaila et al., 2020).

In contrast, harmful subsidies can boost

capacity to a level where the exploitation of

natural resources surpasses the maximum

sustainable yield, resulting in the over ex-

ploitation of natural capital. Additionally, Su-

maila (2019) specied that resource trans-

fers articially increase prots, reducing the

cost of sheries and increasing the income

received by fishermen. At the same time,

Formenti (2020) expressed that fisheries

subsidies generate economic, environmen-

tal and social implications, so they should

be considered a complex political issue.

Against this backdrop, Montemayor et

al. (2020) expressed that the effects of har-

mful subsidies on fisheries are well docu-

mented. The excess of capacity generated

by subsidies leads to overshing, while de-

clining sh stocks can generate collapses

and effects on ecosystems and economies.

Within this framework, Skerrit and Sumaila

(2021) dened Asia and Europe as the lar-

gest regional providers of harmful subsidies.

Furthermore, China ranks first in absolute

harmful subsidies, and fourth in terms of

harmful subsidies provided per km2(Ske-

rrit and Sumaila, 2021). Likewise, Sengupta

(2022) expressed that the repercussions of

the Chinese deep-sea fleet are not com-

parable with the subsistence and artisanal

shing from developing communities. Spe-

cially in the current context, where China is

considered the most subsidizing economy

in the world.

On the other hand, it is worth mentio-

ning that the biggest amount of the fish

Cordero, S., & Pinos, L.

184

subsidies is given to the industrial fishing

sector. For example, Schuhbauer et al. (2017)

established that for the year 2009, only 16%

of shing subsidies were delivered to the ar-

tisanal sector, while more than quadruple of

them were delivered to the industrial sector.

Similarly, 81% of the total subsidies delivered

in 2018 (US$28.8 billion) went to large-sca-

le industrial shing, while only 19% (US$6.6

billion) went to the artisanal shing sector

(Schubauer et. Al, 2020). In accordance with

Lim et. al (2020), the fact that more than 80%

of worldwide subsidies have been granted

to the large-scale industrial sector, threa-

tens sheries in developing countries and

endangers sh populations.

Finally, Formenti (2020) established that

fishing subsidies are problematic becau-

se they introduce distortions in trade, with

commercial and disruptive consequences.

For instance, sheries in countries that do

not subsidize overfishing are harmed be-

cause their counterparts in countries that

do subsidize overshing can supply sh at

lower costs, earning greater profits. Simi-

larly, Wang and Popova (2023) argued that

fisheries subsidies are the main cause of

overshing, overcapacity and illegal, unre-

ported and unregulated shing. At the same

time, such subsidies put the least developed

countries at a disadvantaged situation in in-

ternational competition, because non-sub-

sidized sherman will not receive the same

level of benets as the industrialized ones.

At last, but not least, it is worth mentioning

that the rise in trade in sh and shery pro-

ducts is associated with an increase in trade

disputes submitted to the WTO. “Of the 607

WTO trade disputes between 1995 and 2021,

twenty-four concerned sh and shery pro-

ducts” (Wang and Popova, 2023).

5.3 Subsidies to the manufacturing

industry and state sector

Once that the effects in of subsidies in

the A sector have been explained, it is also

necessary to refer to the effects that subsi-

dies can generate in other industries. In this

way, Table 2 shows the different effects co-

rresponding to the subsidies to the manu-

facturing industry and state sector.

Sector Subsector Country Impact

Production Competence Markets Prices Ambiental Social Polítics Description

C19 Coal China X X X

Increase

in pro-

ducction,

exports an

domestic

sales

C30 Shipbuil-

ding China X X

Overca-

pacity

and mrket

distortion

Table 2

Effects of subsidies on the manufacturing industry and public administration activities

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Sector Subsector Country Impact

Production Competence Markets Prices Ambiental Social Polítics Description

C30 Shipbuil-

ding China X X

Changes in

the market

share and

in inter-

national

prices

C30 Shipbuil-

ding China

and India XTrade

disputes

C8413 Steel China X

Price

increase

(when sub-

sidies are

withdrawn)

C8413 Steel and

Alumi-

nium China X X

Market

distortion,

trade dis-

putes

C8413 N/D China X Overcapa-

city

C8413 Alumi-

nium China X Distortion

of compe-

tition

Source: Adapted from the authors.

In general terms, Steger (2010) dened

that government subsidization of industry

is one of the most widespread problems in

international trade, since all governments

take part in some way in their national eco-

nomies to achieve certain industrial or social

policy objectives. At the same time, Bhala

and Deuckjoo (2019), established that Chi-

na is basically the only country that offers

substantial nancial and non-nancial sub-

sidies, which is closely related to the results

presented in Table 2.

In the regard of the effects, Xiang and

Kuang (2020) established that subsidies to

the manufacturing industry stimulate do-

mestic coal production, which results in a

reduction of imports from foreign markets

and ends up generating a negative tra-

de destruction effect. For example, Chine-

se subsidies reduce Chinese coal imports

from Australia, Indonesia, the United States,

Colombia and Russia by 16.5%, 17.3%, 23.8%,

22.6% and 21.2% respectively. At the same

time, Chinese coal exports to Japan, India

and South Korea increase by 25.5%, 28.3%

and 25.3%, after receiving subsidies. In ad-

dition, the study expressed that subsidies to

this industry generate serious damages to

the environment.

Similarly, Li and Tu (2020) established

that China's subsidies, combined with lax

competition policies, provide its companies

with a competitive advantage. Thus, the au-

thor states that China has resorted to gran-

Cordero, S., & Pinos, L.

186

ting subsidies in the steel, shipbuilding and

railway sectors to obtain scale cost advan-

tages, which are later used to enter interna-

tional markets.

On the other hand, the shipbuilding sec-

tor has also been affected by subsidies. Wi-

thin this framework, global shipbuilding ca-

pacity has long exceeded demand due to

the prevalence of subsidies to the industrial

sector (Shaffer et al., 2015). Additionally, ac-

cording to Wuttke (2017) subsidies are con-

tributing to excess capacity in the low and

medium levels of the Chinese market. Con-

sequently, even representatives of China's

National Development and Reform Com-

mission claimed that the subsidies granted

to this industry are not sustainable (Wuttke,

2017).

According to Bhala and Deukjoo (2019),

“the general consequence of excess capa-

city and production on a global scale is the

outward shift of the supply curves for goods

such as steel and aluminum” (p.3). The au-

thors noted that this led to a decline in inter-

national prices and increased pressure on

producers from other countries, such as the

United States. Additionally, it was determi-

ned that Chinese state-owned enterprises

are a fundamental cause of these structu-

ral imbalances. However, it was emphasized

that not all sectors have been inuenced by

public companies and those non-transpa-

rent behaviors which lead to overcapacity.

Moreover, Brown and Hillman (2019)

referred to the provision of subsidies to the

steel sector in China, where state-owned

enterprises supply inputs to production, wi-

thout considering market competition. Ini-

tially, it those subsidies were internationally

accepted since they increased the demand

for imported inputs such as coal and iron

from Australia and Indonesia. However, in

2012, when China's growth slowed by 7% and

its domestic demand for steel and alumi-

num fell, the surplus supply was redirected

to international markets. As a result, China's

share of the global steel and aluminum in-

dustries rose from 25% to over 50% of total

production and capacity. Consequently,

the United States imposed tariffs on these

sectors in 2018, generating effects to coun-

tries like Canada, Mexico, and EU members,

despite none of them was accused of using

subsidies.

5.4 The issue of transparency

The issue of transparency is broad and

challenging to address. According to the

WTO (n.d.), transparency is a fundamental

pillar and a legal obligation of the organi-

zation, as stated in Article X of the GATT and

included in Article 25 of the ASCM. However,

Low (2022) identied transparency as a sys-

temic problem within the WTO. The author

noted that, beyond enhancing certainty

and predictability through prior contractual

commitments on trade rules, the WTO aims

to reduce information asymmetries via sys-

tematic and periodic notications. Despite

this, the convergence of rules within the WTO

remains a chimera, so he places the issue of

transparency as an essential point of reform

(Low, 2022).

Similarly, Hoekman et al. (2020) expres-

sed that the ASMC commands the notifi-

cation of subsidies to ensure transparen-

cy, but this requirement has not been fully

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met. Thus, the World Trade Organization

(2021) reported that 50 members failed to

submit notications for 2011, 57 for 2015, 67

for 2017, and 80 for 2019. The proportion of

member states not making any notications

has signicantly increased since 1995, rising

from 25% to 49%. Collins-Williams and Wolfe

(2010) emphasized the need for WTO mem-

bers to improve timely compliance with their

notication obligations and to enhance ins-

titutional capacity for analyzing and acces-

sing reported information.

Conversely, Shaffer et al. (2015) explo-

red reasons why countries fail to notify their

subsidies, citing bureaucratic challenges,

fear of disclosing adverse information, po-

tential legal disputes over actionable sub-

sidies, ambiguity in agreement terms, and

the ease of reporting self-initiated actions

(such as compensatory measures). They

also pointed out that the OECD holds the

largest database on subsidies but lacks

coherent denitions across industrial, agri-

cultural, and environmentally harmful sub-

sidies, leading to confusion and deciencies

in notications.

Formenti (2020) noted that "govern-

ment disclosures are at an all-time low, and

most countries have not met their notica-

tion obligations" (p.3). In the regard of this

study, less than half of the notications from

China and the United States meet optimal

transparency criteria, with compliance rates

of 46% and 38%, respectively. Similarly, Lim

et al. (2021) reported a decline in the noti-

cation levels of WTO members from 50% to

38% since 1995.

At the same time, Brown and Hillman

(2019) argued that the voluntary notica-

tion system for subsidies is ineffective, with

several countries ignoring or delaying their

reports. In addition, the authors expressed

that lack of consensus on the denition of a

subsidy further contributes to the low num-

ber of notications.

Likewise, Van Heulen (2023) highlighted

signicant deciencies in the ASCM, noting

that some forms of state intervention, in-

cluding subsidies to and from state-owned

enterprises, are not automatically recogni-

zed as "subsidies" under the WTO denition.

Borlini (2019) added that subsidies often

bypass direct government channels and

are instead provided through affiliated or

controlled entities. In this way, Dhingra and

Meyer (2021) called for greater transparency

in trade policy and a stronger link between

trade policy and other political priorities.

Lennan and Flitzer (2023) observed that

the ASCM lacks a specic framework for re-

gulating sheries subsidies due to signicant

discrepancies in information provided by

organization members. On the other hand,

The AFS introduces procedural obligations

and provisions to enhance the transpa-

rency of fisheries subsidies, which accor-

ding to Wang and Popova (2023), have a

stronger legal impact against overcapacity

and overshing. However, the AFS requires

approval from two-thirds of the multilateral

forum, a something not achieved until the

end of this investigation (WTO, n.d).

Schuhbauer et al. (2020) emphasized

the need for increased transparency in -

shing subsidy reports, highlighting the im-

portance of information on specific types

of subsidies granted, their distribution, and

their impact on each subsector. In addi-

Cordero, S., & Pinos, L.

188

tion, they suggested that WTO notications

should require member countries to disclo-

se how subsidies are allocated.

Within this framework, Gulotty (2022),

expressed that the "rules-based" approach

is encountering challenges in adapting to

changes in the global trading system, as

the legal texts are crafted to address the

needs of the Member States that develo-

ped the regulations. The expansion of global

production and economies like China has

challenged the effectiveness of current WTO

standards. Finally, the author notes that the

issue of subsidies from market economies

such as China, with its signicant state sec-

tor, makes the issue of subsidies inevitable

as issues that were overlooked in the past.

Treffler (2019) added that the lack of

transparency from the Chinese govern-

ment and its companies complicates the

assessment of industrial subsidies in China.

Despite China's claim of fully complying with

its notification obligations under all WTO

agreements, the WTO Secretariat pointed

out that some subsidies remain unreported,

particularly those related to state-owned

enterprises and domestic support (WTO,

2021). As a consequence, Sacerdoti and

Borlini (2019) argued that the WTO system

has been under strain in recent years due to

member states' inability to resolve conicts

over procedural rules such as notications,

transparency, and disputes.

Finally, Li and Tu (2020) mentioned the

existence of a trilateral group made up of

the United States, the European Union, and

Japan, which aims to enhance transparen-

cy within the WTO. Their suggestions include

implementing administrative sanctions for

non-compliance with notication require-

ments, encouraging counter-notications,

and categorizing unnotified subsidies as

"actionable subsidies" within the WTO fra-

mework. Similarly, Lino (2023) argued that

Free Trade Agreements (FTAs) could serve

as a testing ground to address gaps in WTO

subsidy regulations, as the organization's

reform efforts in this area are not expected

to succeed soon. Furthermore, Lino (2023)

established that countries like Japan and

the EU are beginning to prioritize subsidies

in their bilateral agreements.

Discussion

Throughout this study, it has been found

that subsidies act as a mechanism to en-

courage production, generating various

economic, social, and environmental im-

pacts. For instance, KravcakovaVozarova

and Kotulic (2016) and Wang et al. (2020)

found a positive correlation between the

provision of subsidies and the development

of the respective industries, resulting in be-

nets such as increased farmer income, re-

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 189

duced import quotas, and economic growth

in specic regions.

In this way, it can be noted that subsi-

dies function as an incentive to strengthen

a certain industry, in this case agriculture,

since they reduce production costs and en-

courage more production, generating deve-

lopment. In this sense, producers will benet

from the delivery of subsidies, as well as the

importance of the sector that receives them.

Thus, Collins and Park (2019) were correct in

establishing that subsidies can serve social

issues, such as increasing the importance

of underdeveloped areas. However, this will

depend on the extent to which aid is deli-

vered, since when supply exceeds domes-

tic demand, said supply will move to foreign

markets.

Similarly, authors such as Hopewell et al.

(2019) and Xiang & Kuang (2020) described

subsidies as "articial" aid and agreed that

they can alter global market shares and

distort trade. Bown and Hillman (2019) and

Kaloupsidi (2018) demonstrated that Chi-

na's subsidies have signicantly increased

its global market shares at the expense of

competitors and global prices. It is no coin-

cidence that all the authors mentioned refer

to China, as this research has consistently

shown that China expertly manages subsi-

dies across the different industries.

Although subsidies can promote deve-

lopment, the issue is that countries such as

China continue to provide incentives without

considering factors like internal demand.

This leads to overproduction, which then

spills into external markets, affecting market

shares and international prices. Thus, subsi-

dies can be both highly useful and potentia-

lly harmful, depending on their application.

Regarding environmental effects, the

research has predominantly shown nega-

tive impacts. For instance, Montemayor et

al. (2020) and Sumaila (2019) agreed that

subsidies promote overcapacity and over-

shing, as lower costs and higher incomes

encourage indiscriminate shing. In addi-

tion, Wang et al. (2022) noted that subsidies

increase environmental harm through the

use of machinery and other inputs.

In this way, it has been found that sub-

sidies correlate with negative environmen-

tal impacts due to intensified production.

The reduction in costs and the introduction

of machinery not only result in economic

effects but also in greater degradation of

soil, oceans, and other ecosystems. Althou-

gh Sumaila (2020) argued that "benecial"

subsidies could be seen as investments in

fishery resource development, promoting

sustainable resource management and

stability in fishing communities, this view

is kind of utopic, and contrary effects have

been observed in practice due to the nature

of the subsidies.

Within this framework, Schuenbauer

et al. (2020) and Schuenbauer et al. (2017)

noted that only a small percentage of sub-

sidies were directed to the artisanal sector,

with the majority going to the industrial sec-

tor. Industrial eets, with their greater captu-

re capacity, lead to overexploitation of sh

populations, and subsidies to the industrial

sector create unfair competition for artisa-

nal fishermen, who have fewer resources.

This results in wealth and power concen-

Cordero, S., & Pinos, L.

190

tration within the sector, disadvantaging

artisanal shermen.

It should be noted that on practice, the

large entities are those that benet the most,

often at the expense of small producers and

the environment. This denitely underscores

the importance of the World Trade Organi-

zation, as effective subsidy policies must

focus on sustainability, equity, and resour-

ce conservation to mitigate these effects.

Nevertheless, Hoekman and Nelson (2020)

expressed that there is currently no notion

of what constitutes a "good" subsidy under

the WTO.

Conversely, Wuttke (2017) and Shaffer et

al. (2015) agreed that subsidies to China's

industry create overcapacity. At the same

time, Brown and Hillman (2019), Kaloupsidi

(2018), and Lim and Tu (2020) concurred

that China's market shares have grown in

recent years by providing a comparative

advantage to its steel, aluminum, and ship-

building industries. This has led to numerous

trade disputes, affecting both the industrial

and agricultural sectors (Brown and Hillman,

2019; Gulotty, 2022). Thus, beyond the diffe-

rent effects, the common and greatest de-

termining factor among all of these authors

is that the imposition of subsidies comes

from China.

Consequently, although Evenett and

Fritz (2021) identied China, the United Sta-

tes, and the European Union as the top glo-

bal providers of subsidies. This research has

shown that China is the leading economy

in terms of subsidy provision, whether in

agriculture, fisheries, or industry (OECD,

2023; Skerrit and Sumaila, 2021; Bhala and

Deuckjoo, 2019). At the same time, it is im-

portant to note that the Asian giant's subsi-

dies generate strong negative effects, which

do not discriminate between industries or

markets. This will strongly benet the Asian

giant, which has grown signicantly due to

its subsidy policies. Therefore, it is crucial to

examine the global subsidy framework un-

der the WTO and assess the transparency of

different countries.

Transparency within the World Trade

Organization (WTO) is a complex, multifa-

ceted issue that has sparked various expert

opinions and analyses. Reviewing different

authors' perspectives reveals points of con-

sensus and areas of criticism, highlighting

the strengths and weaknesses of the current

system. It is also important to analyze the

organization’s agreements and standards.

First of all, it is necessary to establish

that transparency in the World Trade Or-

ganization (WTO) is a complex and multi-

faceted issue that has generated various

opinions and analyzes by experts. Through

reviewing the perspectives of different au-

thors, several points of consensus can be

identied, as well as areas of criticism that

highlight both the strengths and weaknes-

ses of the current system. In addition, it is

important to do an analysis based on what

the different agreements or written stan-

dards of the organization.

According to the WTO (n.d.), transpa-

rency is a fundamental pillar and legal obli-

gation within its agreements. However, the

organization reported a signicant increase

in the proportion of member states failing to

submit notications since 1995 (WTO, 2021).

Authors like Hoekman et al. (2020) and For-

menti (2020) also noted that many WTO

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 191

members do not fully comply with their no-

tication obligations. Within this context, it is

possible to mention that the lack of adequa-

te notication by many WTO members is a

critical issue affecting the transparency and

fairness of the multilateral trading system.

In this way, authors like Treffler (2019)

and the WTO (2021) highlighted China's

lack of transparency in its notifications. It

is evident that the WTO is at a critical point

concerning transparency and notication

deciencies. Consequently, several authors

have explored potential reasons for this lack

of transparency.

In this regard, Shaffer et al. (2015) and

Van Heulen (2023) agreed that a common

issue leading to the lack of notification is

the ambiguity surrounding what the agree-

ments say. For instance, Bown and Hillman

(2019) established that state-owned com-

panies do not notify subsidies since they are

not under the framework of the ASMC; since

the agreement establishes that a subsidy is

a nancial contribution made by a “gover-

nment entity” or a “public body”, excluding

public companies (Barbosa and Bernal,

2007). Furthermore, Steger (2010) expres-

sed there is no concrete understanding of

what confers a benefit. However, the WTO

species that the ASMC applies not only to

measures of national governments, but also

to those of subnational governments and

state-owned enterprises (WTO, n.d.).

As it can be noted, there are signicant

discrepancies and different opinions regar-

ding the interpretation of WTO regulations.

This can be attributed to two main factors.

Firstly, it is not in China's interest to report

subsidies provided by its state-owned com-

panies, as these subsidies have negative

impacts. As a consequence, China can ex-

ploit these "discrepancies" and the inherent

aws within the agreements. Thus, the lack

of regulation and specicity regarding sub-

sidies within the WTO framework is identied

as a major reason for the lack of notication.

Similarly, it can be established that to

date there is no multilateral organization

in charge of systematically recovering, ga-

thering and disseminating data on sheries

subsidies, since it is not under the regulation

of the ASCM (Lennan & Switzer, 2023; For-

menti, 2020). Furthermore, the multilateral

negotiation process to reach an agreement

on sheries subsidies has taken a little more

than 20 years, and to date it has not come

into force.

On the other hand, although Formenti

(2020) expressed that government notifi-

cations to sheries were at a historical mi-

nimum; other authors such as Wang and

Popova (2023) established that agreements

such as the AFS are generating a great le-

gal impact against excess capacity and

overshing; so that these subsidies will go

from being “harmful and ambiguous” to

“protable and transparent.” Thus, althou-

gh negotiating an agreement that addres-

ses sheries subsidies could be considered

great advance in multilateralism within the

framework of the WTO, the agreement can-

not address these subsidies until it comes

into force.

Additionally, it should be noted that

the WTO faces a major obstacle, since the

agreements require the acceptance of at

least two-thirds of the forum prior to its en-

try into force. Taking into account that large

Cordero, S., & Pinos, L.

192

economies will often prefer to obtain econo-

mic benets rather than environmental and

social benets; the implementation of such

agreements may be delayed. Something

similar happens with the notion of subsidies

to state-owned companies, especially ta-

king into account that large economies like

China do not want to touch the issue. In this

way, the WTO's subsidy framework remains

inadequate in mitigating the repercussions

of various types of subsidies. This proves

that the multilateralism of the organization

still faces a lot of inconsistencies; since the

agreements are unable to address some

current subsidy issues. Consequently, au-

thors as Gulotty (2022) and Trefer (2019)

highlight the necessity of reforming the "ru-

les-based" approach of the WTO.

Similarly, Law (2020) identified trans-

parency and subsidies as critical areas for

WTO reform. However, Lino (2023) expres-

sed skepticism about the success of these

efforts in the near future. Given the discus-

sions throughout this document, it is easy

to concur with Lino's view; despite identif-

ying several weaknesses within the WTO

framework, the organization's multilateral

negotiating system has been ineffective in

addressing challenges like subsidies. This

situation is unlikely to improve without coo-

peration, in addition that expecting rapid

progress is unrealistic. The difculty lies in

persuading economic powers like China to

enhance WTO jurisprudence, as this could

sacrice their own economic growth.

Finally, authors such as Lino (2023) and

Li and Tu (2020) demonstrated the existen-

ce of alternative mechanisms to address

subsidies. The necessity for countries to

negotiate specic bilateral clauses within

their free trade agreements is concerning,

as it underscores the WTO's ineffectiveness

in tackling this issue multilaterally. Further-

more, the collaboration of powers such as

the United States, Japan, and the European

Union to address the lack of transparency

within the WTO and their efforts to "fill" its

gaps suggest certain conclusions. While the

initiative for cooperation is commendable,

it also highlights the signicant deciencies

within the WTO and the challenge of con-

fronting economies like China, which has

shown little interest in these negotiations.

Conclusions

The increase in subsidies among the

largest global economies has generated a

signicant increase in trade tensions, and

even raising fears of subsidy wars. The World

Trade Organization (WTO) is the only global

entity responsible for regulating this issue

through its agreements. Thus, this investi-

gation aimed to examine the framework of

global subsidies under WTO rules and dis-

cuss international transparency regarding

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 193

this issue. A systematic literature review

was conducted based on the 2020 PRISMA

declaration to meet the initially set of ob-

jectives. Consequently, several conclusions

have been reached.

Firstly, it was found that subsidies act as

a boost to production, and their effects de-

pend on how this instrument is used. Howe-

ver, in the current global context, this econo-

mic instrument is generating more negative

effects than positive ones. Subsidies lead to

overproduction as producers are strongly

motivated to increase income. This can re-

sult in the displacement of market shares,

changes in global prices, and social and

environmental impacts, depending on the

industry receiving the incentives. For instan-

ce, in the case of sheries subsidies, most

incentives go to industrial fishermen who

engage environmentally invasive practices.

Additionally, these incentives disadvantage

artisanal shermen who compete with sub-

sidized industrial shermen.

A similar situation occurs with agri-

cultural subsidies, where economies like

China allocate a large portion of the state

budget to develop the industry. However,

producers become dependent on nancial

aid and continue producing despite insuf-

cient demand. Within this framework, while

subsidies can have positive effects, such

as encouraging production to promote the

growth of underdeveloped regions or pro-

moting shing resources; it has been noted

that these instruments are often misused.

Otherwise, they increase capacity quotas

and shift supply to foreign markets. In addi-

tion, it was found that the subsidies provided

by Chinese governments and state-owned

companies are mostly responsible for these

harmful effects at a global level.

Secondly, the inefciency of the World

Trade Organization in addressing these

effects has been highlighted. The organiza-

tion's transparency and credibility are at a

critical point, particularly as larger econo-

mies like China have ceased reporting their

subsidies. Thus, significant shortcomings

were found in the quantity and quality of

notications, as well as large discrepancies

in the understanding of the WTO's regula-

tions and gaps in their agreements. China

currently occupies a "privileged" position,

indiscriminately subsidizing its various sec-

tors: agricultural, industrial, and shing.

Nevertheless, the WTO's agreements do

not adequately address crucial contempo-

rary issues, such as subsidies to Chinese

state-owned companies or fisheries sub-

sidies. Consequently, agreements like the

ASMC have become outdated and unable to

meet the needs of the current dynamic eco-

nomic context. Furthermore, the organiza-

tion's difculty in reaching new agreements

on urgent issues, such as sheries subsidies,

calls into question the WTO's multilateral ne-

gotiating capabilities. This situation benets

China, which continues to exploit legal loo-

pholes and the inefciency of the WTO. Con-

sidering everything stated in this document,

it is clear that improving the situation soon is

unlikely, since the negotiation and progress

capabilities of the multilateral forum are li-

mited.

However, it is worth mentioning that

this study also has signicant weaknesses

and limitations. Firstly, it was challenging to

Cordero, S., & Pinos, L.

194

quantify in detail the real effects of subsi-

dies on a global scale, so that they limited

the depth of the analysis. Additionally, se-

veral types of subsidies, such as those for

vehicles, fossil fuels, and the energy sector,

were not considered. Furthermore, agricul-

tural subsidy policies such as the Common

Agricultural Policy of the European Union

(CAP) were not taken into account, becau-

se although this addresses crucial subsidy

issues with a sustainable approach, these

types of agreements fall outside the WTO

framework.

In addition, one of the major challenges

of this research was nding data on noti-

cations by different countries, a task com-

plicated by the shortcomings of the WTO.

Although subsidies are economic policy

instruments that are difficult to measure,

the WTO is the only multilateral organization

responsible for having such information. On

the other hand, although the importance of

sheries subsidies is recognized to date, as

there is no current framework that requires

notication of such incentives, there are few

empirical studies that calculate the notica-

tion percentages. Consequently, this study is

a tool for scholars, researchers, and others

interested in strengthening subsidies wi-

thin the WTO framework, as it highlights the

main weaknesses of the forum on this topic.

It also underscores the need for continued

research on the effects of subsidies in di-

fferent industries, particularly through case

studies to identify potential gaps. This can

help enhance this discipline.

To conclude, criticism of inconsisten-

cies in definitions and notification proce-

dures highlight the need for a review and

harmonization of WTO rules. Considering

economic, political, and social trends, whe-

re China's market economy poses a threat

to the rest of the world, improving institutio-

nal capacity and ensuring compliance with

notication obligations are crucial steps to

enhance WTO transparency. However, this

effort is constrained by the broad scope of

current agreements and the forum's difcul-

ty in adopting new multilateral agreements.

Especially when it is not in the interest of the

most subsidizing economies to be regulated

by new agreements, so hopes for improve-

ment remain distant.

CRediT authorship contribution

statement:

Luis Pinos Luzuriaga: Conceptualization,

Formal analysis, Funding acquisition, Project

administration, Supervision, Validation, Wri-

ting – review and editing.

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 195

Sofia Cordero: Data curation, Formal

análisis, Investigation, Methodology, Resour-

ces, Software, Visualization, Writing – origi-

nal draft.

Declaration of competing interest:

The authors have no competing inte-

rests to declare.

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Appendix A

Systematic Literature Matrix

Tipo de

fuente Autor Codicación de

las fuentes

Año de

publicación

País de

origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista Anderson, K.

Contributions of

the GATT/WTO to

the global econo-

mic welfare: Em-

pirical Evidence

2016 Australia

Contribuciones

del GATT/OMC al

bienestar econó-

mico global: evi-

dencia empírica

Evidencia empírica

sobre las contribu-

ciones del GATT/

OMC al bienestar

económico global

Scopus

Revista

Barbosa Mariño,

J. D., Bernal

Corredor, D.,

Figueroa Sierra

& Asociados, &

Godoy & Hoyos

Abogados

Las subvenciones

prohibidas en el

acuerdo sobre

subvenciones y

medidas com-

pensatorias de la

OMC: un análisis

de la jurispruden-

cia de la OMC

Colombia Redalyc

Artículo

de revista

Bhala, R., &

Deuckjoo, N.

The WTO´S under

capacity to deal

with over-capa-

city

2019 Estados

Unidos

La capacidad

insuciente de la

OMC para mane-

jar la sobrecapa-

cidad global

Evaluación de la

capacidad insu-

ciente de la OMC

para tratar con la

sobrecapacidad

global

Web of Science

Artículo

de revista Borlini, L.

When the Levia-

than goes to the

market: A critical

evaluation of the

rules governing

state-owned en-

terprises in trade

agreements

2020 Países Bajos

Evaluación crítica

de las reglas que

rigen las em-

presas estatales

en los acuerdos

comerciales

Evaluación crítica

de las reglas que

rigen las empresas

estatales en los

acuerdos comer-

ciales

Web of Science

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las fuentes

Año de

publicación

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Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista Borlini, L.

The Covid 19

Exogenous Shock

and the Crafting

of New Multila-

teral Trade Rules

on Subsidies and

State Enterprises

in the Post-Pan-

demic World

2023 Países Bajos

El choque exógeno

del Covid-19 y la

elaboración de

nuevas reglas

comerciales

multilaterales

sobre subsidios y

empresas esta-

tales en el mundo

post-pandémico

Análisis de las nue-

vas reglas comer-

ciales multilaterales

sobre subsidios y

empresas estatales

post-pandemia

Web of Science

Artículo

de revista

Brown, C. P., &

Hillman, J. A.

WTO’ing a Resolu-

tion to the China

Subsidy Problem

2022 Reino Unido Problemas de

subsidios en China

Resolución de

problemas de sub-

sidios en China a

través de la OMC

Web of Science

Artículo

de revista

Cisneros Monte-

mayor, A., Ota B,

Y., Bailey C, M., C

Hicks, C., Rogers,

A., Sumaila, R., &

Virdin, J.

Changing the na-

rrative on sheries

subsidies reform:

Enabling transi-

tions to achieve

SDG 14.6 and

beyond

2020 Reino Unido Reforma de subsi-

dios pesqueros

Transiciones para

lograr el ODS 14.6 y

más allá

Scopus

Artículo

de revista

Collins, D. A., &

Park, T. J.

Deafening Silence

or Noisy Whisper:

Omission Bias

and Foregone Re-

venue Under the

WTO Agreement

on Subsidies and

Countervailing

Measures

2017 Países Bajos

Omisión y pérdida

de ingresos en

el acuerdo de la

OMC sobre sub-

sidios

Análisis del sesgo

de omisión y pér-

dida de ingresos

bajo el acuerdo

de la OMC sobre

subsidios

Web of Science

Artículo

de revista

Collins-Williams,

T., & Wolfe, R

Transparency

as a trade policy

tool: the WTO’s

cloudy windows

2010 Reino Unido

Transparencia en

políticas comer-

ciales

Análisis de la trans-

parencia como

herramienta de

política comercial

en la OMC

Scopus

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fuente Autor Codicación de

las fuentes

Año de

publicación

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origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista

Dhingra, S., &

Meyer, T.

Leveling the

Playing Field:

Industrial Policy

and Export-Con-

tingent Subsidies

in India–Export

Related Measures

2021 Reino Unido Política industrial y

subsidios en India

Medidas relaciona-

das con exporta-

ciones y subsidios

industriales en India

Web of Science

Informe Evenett, S. J., &

Fritz, J.

SUBSIDIES &

MARKET ACCESS:

TOWARDS AN

INVENTORY OF

SUBSIDIES BY

CHINA, THE EU &

THE USA

2021 Suiza

Inventario de sub-

sidios por China, la

UE y los EE.UU.

Creación de un

inventario de subsi-

dios por China, la UE

y los EE.UU.

SSRN

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The Battle Over

Transparency. In

The Right to Know:

Transparency for

an Open World

2007 Estados

Unidos

Transparencia y

derecho a la infor-

mación

Batalla por la trans-

parencia en el con-

texto del derecho a

la información

Google acadé-

mico

Informe

Fondo Mone-

tario Interna-

cional, Organi-

zación para la

Cooperación

y el Desarrollo

Económicos,

Organización

Mundial del Co-

mercio, & Banco

Mundial

Subvenciones,

Comercio Y

Cooperación

Internacional

2022 Internacional

Subvenciones y

cooperación inter-

nacional

Análisis de subven-

ciones y su impacto

en el comercio y

cooperación inter-

nacional

N/A

Artículo

de revista Formenti, L.

Assessing trans-

parency in she-

ries subsidies: A

notication-dri-

ven analysis

2022 Reino Unido

Transparencia en

subsidios pes-

queros

Análisis impulsado

por noticaciones

sobre la transpa-

rencia en los subsi-

dios pesqueros

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Cordero, S., & Pinos, L.

204

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publicación

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origen

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especíco

Base de

datos

Informe Gale, F.

Growth and Evo-

lution in China’s

Agricultural Su-

pport Policies

2013 Estados

Unidos

Políticas de apoyo

agrícola en China

Crecimiento y

evolución de las

políticas de apoyo

agrícola en China

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Artículo

de revista Gulotty, R. WTO Subsidy

Disciplines 2023 Reino Unido Disciplina de sub-

sidios de la OMC

Análisis de las disci-

plinas de subsidios

de la OMC

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Artículo

de revista

Hoekman, B., &

Nelson, D.

Rethinking inter-

national subsidy

rules

2020 Reino Unido Reglas internacio-

nales de subsidios

Reevaluación de las

reglas internacio-

nales de subsidios

No especicada

Informe

Hoekman, B. H. X.

T. a. R., Wolfe, R.,

& Tu, X.

China and the

WTO Reform s.f Italia Reforma de la

OMC y China

Análisis de la refor-

ma de la OMC en

relación con China

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Artículo

de revista Hopewell, K.

US-China conict

in global trade

governance: the

new politics of

agricultural sub-

sidies at the WTO

2019 Reino Unido

Conicto entre

EE.UU. y China en

la gobernanza del

comercio agrícola

en la OMC

Nueva política de

subsidios agrícolas

en la OMC debido al

conicto EE.UU.-Chi-

Scopus

Informe

Instituto Nacio-

nal de Estadís-

ticas y Censos

(INEC)

CIIU 4.0 2012 Ecuador

Clasicación

Industrial Interna-

cional Uniforme

Clasicación de ac-

tividades económi-

cas en Ecuador

Instituto Nacio-

nal de Estadísti-

cas y Censos

Artículo

de revista

Josling, T., &

Tangermann, S.

Implementa-

tion of the WTO

Agreement on

Agriculture and

Developments for

the Next Round of

Negotiations

1999 Reino Unido

Implementación

del Acuerdo de

la OMC sobre

Agricultura y

desarrollos para la

próxima ronda de

negociaciones

Implementación y

desarrollos futuros

del Acuerdo de la

OMC sobre Agri-

cultura

Google acadé-

mico

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Tipo de

fuente Autor Codicación de

las fuentes

Año de

publicación

País de

origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista Kalouptsidi, M.

Detection and Im-

pact of Industrial

Subsidies: The

Case of Chinese

Shipbuilding

2018 Reino Unido

Detección e im-

pacto de subsidios

industriales en

la construcción

naval china

Detección e im-

pacto de subsidios

industriales en la

construcción naval

china

Scopus

Artículo

de revista Karim, R.

Transparency is

the most impor-

tant governance

issue in the WTO

subsidy control

2023 Internacional

Importancia de la

transparencia en

la gobernanza de

los subsidios en la

OMC

Análisis de las

políticas de control

de subsidios de la

OMC, implicaciones

para la gobernanza

y la transparencia y

recomendaciones

para mejorar la

transparencia en la

OMC

SSRN

Artículo

de revista

Kravcakova

Vozarova, I., &

Kotulic, R.

Quantication

of the effect of

subsidies on the

production per-

formance of the

Slovak agriculture

2015 Países Bajos

Efecto de los

subsidios en el

rendimiento de la

producción agrí-

cola eslovaca

Cuanticación

del efecto de los

subsidios en el

rendimiento de la

producción agrícola

en Eslovaquia

Scopus

Artículo

de revista

Kumar, R., Ravi-

nesh Kumar, R.,

Stauvermann, P.

J., & Arora, P.

Effect of Fisheries

Subsidies Nego-

tiations on Fish

Production and

Interest Rate

2020 Suiza

Negociaciones de

subsidios pes-

queros y su efecto

en la producción

pesquera y la tasa

de interés

Impacto de las ne-

gociaciones sobre

subsidios pesque-

ros en la produc-

ción de peces y las

tasas de interés

Scopus

Artículo

de revista

Lennan, M., &

Switzer, S.

Current Legal De-

velopments World

Trade Organiza-

tion

2023 Países Bajos

Desarrollos legales

actuales en la Or-

ganización Mun-

dial del Comercio

Análisis de los

desarrollos legales

actuales en la OMC

Scopus

Cordero, S., & Pinos, L.

206

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Año de

publicación

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origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista Li, S., & Tu, X.

Reforming WTO

Subsidy Rules:

Past. Experiences

and Prospects

2020 China

Reforma de las re-

glas de subsidios

de la OMC

Experiencias pasa-

das y perspectivas

futuras de la refor-

ma de las reglas de

subsidios de la OMC

Web of Science

Artículo

de revista

Lim, S. S., Kim, C.

M., Kim, D., Sung,

K., & Lee, E. S.

The road ahead

and the future

of eliminating

sheries subsidies

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2022 Francia

Eliminación de

subsidios pesque-

ros en el marco de

la OMC

Análisis del futuro

y el camino hacia

la eliminación de

subsidios pesque-

ros en el marco de

la OMC

Scopus

Artículo

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Disciplining subsi-

dies through free

trade agreements

(FTAs): Emerging

developments in

Japan’s FTAs and

their implications

2023 Reino Unido

Disciplina de

subsidios a través

de acuerdos de

libre comercio en

Japón

Desarrollos emer-

gentes en los

acuerdos de libre

comercio de Japón

y sus implicaciones

Web of Science

Artículo

de revista Low, P.

The WTO in Crisis:

Closing the Gap

between Conver-

sation and Action

or Shutting Down

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2022 Reino Unido

La crisis de la OMC

y la brecha entre

la conversación y

la acción

Análisis de la crisis

de la OMC y pro-

puestas para cerrar

la brecha entre la

conversación y la

acción

Web of Science

Artículo

en línea

Mera, Rabobank,

China’s selling

may keep food

prices low this

year

2017 Reino Unido

Impacto de la

venta de China en

los precios de los

alimentos

Análisis de cómo

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bajos los precios

de los alimentos

durante el año

N/A

DICERE Revista de Derecho y Estudios Internacionales

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Tipo de

fuente Autor Codicación de

las fuentes

Año de

publicación

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origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista

Meyer, T., &

Dhingra, S.

Leveling the

Playing Field:

Industrial Policy

and Export-Con-

tingent Subsidies

in India-Export

Related Measures

2021 Reino Unido

Política industrial y

subsidios contin-

gentes a la expor-

tación en India

Medidas relaciona-

das con la expor-

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INFORME SOBRE EL

COMERCIO MUN-

DIAL. B DEFINICIÓN

DE LAS SUBVEN-

CIONES

2006 Internacional

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Denición detallada

de subsidios según

la OMC y su impac-

to en el comercio

mundial

OMC

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Organización

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mercio

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In WORLD TRADE

REPORT Six deca-

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2007 Internacional

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Análisis de la trans-

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Organización

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mercio

NOTIFICATION

PROVISIONS

UNDER THE

AGREEMENT ON

SUBSIDIES AND

COUNTERVAILING

MEASURES (12)

2021 Internacional

Noticación de

disposiciones

bajo el acuerdo

sobre subsidios y

medidas compen-

satorias

Provisiones de

noticación bajo el

acuerdo sobre sub-

sidios y medidas

compensatorias

OMC

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Base de

datos

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Organización

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mercio

OMC - Negocia-

ciones sobre las

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Negociaciones

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Informe

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OMC

Página

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Organización

Mundial de Co-

mercio

OMC: Subvencio-

nes y medidas

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Internacional

Explicación sobre

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medidas compen-

satorias

Explicación detalla-

da sobre cómo fun-

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compensatorias

OMC

Página

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Organización

Mundial de Co-

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WTO Glossary s. f Internacional Glosario de térmi-

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Denición y expli-

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Informe

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Agricultural Policy

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Información

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Información gene-

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ticos OCDE sobre

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OCDE

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Cooperación y

Desarrollo Eco-

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OCDE-FAO Pers-

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las 2023-2032

2023 Internacional

Perspectivas agrí-

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Análisis de las pers-

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2023-2032

OCDE

Página

web

Oxford´s Univer-

sity Press

subsidy noun -

Denition, pictu-

res, pronunciation

and usage notes |

Oxford Advanced

Learner's Dictio-

nary at Oxford-

LearnersDictiona-

ries.com

Reino Unido

Denición y uso

del término 'sub-

sidio'

Denición, imáge-

nes, pronunciación

y notas de uso del

término 'subsidio'

Oxford

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publicación

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origen

Contenido teórico

general

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Base de

datos

Artículo

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Page, M. J.,

McKenzie, J.

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Declaración

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para la publica-

ción de revisiones

sistemáticas

2020 España

Guía para la publi-

cación de revisio-

nes sistemáticas

Guía actualizada

para la publicación

de revisiones siste-

máticas según la

declaración PRISMA

2020

N/A

Informe Robert Wolfe

World Trade

Organization Eco-

nomic Research

and Statistics

Division Letting

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at the WTO: How

transparency

brings

2013 Internacional Transparencia en

la OMC

Análisis de cómo

la transparencia

mejora la OMC

WTO

Artículo

de revista

Sacerdoti, G., &

Borlini, L.

Systemic

Changes in the

Politicization of

the International

Trade Relations

and the Decline

of the Multilateral

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2023 Alemania

Cambios sis-

témicos en la

politización de las

relaciones comer-

ciales internacio-

nales y el declive

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lateral

Análisis de los cam-

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Cordero, S., & Pinos, L.

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especíco

Base de

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Informe Schrank, W. INTRODUCING FlS-

HERIES SUBSIDIES 2003 Internacional

Introducción a los

subsidios pes-

queros

Explicación y análi-

sis de los subsidios

pesqueros

FAO

Artículo

de revista

Schuhbauer,

A., Skerrit, D.,

Ebrahim, N.,

Le Manach, F.,

Sumaila, R.

The Global Fi-

sheries Subsidies

Divide Between

Small- and Lar-

ge-Scale Fisheries

2020 Suiza

División de los

subsidios pesque-

ros globales entre

la pesca a peque-

ña y gran escala

Diferencias en los

subsidios pesque-

ros a pequeña y

gran escala

Scopus

Artículo

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Schuhbauer, A.,

Chuenpagdee,

R., Cheung, W.

W.L., Sumaila,

U.R., & Greer, K.

How subsidies

affect the eco-

nomic viability

of small-scale

sheries

2017 Internacional

Impacto de los

subsidies en la

viabilidad econó-

mica de las pes-

querías a pequeña

escala

Análisis de las po-

líticas de subsidios,

efectos económi-

cos en pesquerías

loales y sustenibili-

dad de las prácti-

cas pesqueras.

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Informe Sengupta, R.

Fisheries subsi-

dies negotiations

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WTO’s 12th Minis-

terial Conference:

Considerations

for developing

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2022 Malasia

Negociaciones

sobre subsidios

pesqueros hacia

la 12ª Conferencia

Ministerial de la

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ciones para los

países en desa-

rrollo

Consideraciones

para los países en

desarrollo en las

negociaciones de

subsidios pesque-

ros en la OMC

N/A

Artículo

de revista

Shaffer, G., Wol-

fe, R., & Le, V.

Can Informal Law

Discipline Subsi-

dies?

2015 Países Bajos

¿Puede la ley in-

formal disciplinar

los subsidios?

Evaluación de la

capacidad de la ley

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Scopus

Libro Singh, G.

Subsidies in the

Context of the

WTO's Free Trade

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2017 Suiza

Subsidios en el

contexto del sis-

tema de libre co-

mercio de la OMC:

un análisis legal y

económico

Análisis legal y eco-

nómico de los sub-

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de la OMC

Springer

International

Publishing

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fuente Autor Codicación de

las fuentes

Año de

publicación

País de

origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista

Skerrit, D. J., &

Sumaila, R.

Broadening the

global debate on

harmful sheries

subsidies through

the use of subsidy

intensity metrics

2021 Reino Unido

Ampliar el debate

global sobre los

subsidios pesque-

ros perjudiciales

mediante el uso

de métricas de

intensidad de

subsidios

Uso de métricas de

intensidad de sub-

sidios para debatir

los subsidios pes-

queros perjudiciales

Scopus

Artículo

de revista Steger, D.

The Subsidies and

Countervailing

Measures Agree-

ment: Ahead of its

Time or Time for

Reform?

2010 Países Bajos

El Acuerdo sobre

Subvenciones y

Medidas Com-

pensatorias:

¿Adelantado a su

tiempo o es hora

de reformarlo?

Análisis sobre la

vigencia del Acuer-

do sobre Subven-

ciones y Medidas

Compensatorias y

posibles reformas

Web of Science

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de revista

Sumaila, R.,

Ebrahim, N.,

Schunbahuer,

A., Skerrit, D., Li,

Y., Kim, H. S., Ma-

llory, T., Lam, V.

W.L., & Pauly, D.

Updated estima-

tes and analysis

of global sheries

subsidies

2019 Reino Unido

Estimaciones y

análisis actuali-

zados de los sub-

sidios pesqueros

globales

Actualización de

las estimaciones y

análisis de los sub-

sidios pesqueros a

nivel mundial

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de revista Tangerman, S.

Europe's Agricul-

tural Policies and

the Millennium

Round

2002 Reino Unido

Las políticas agrí-

colas de Europa

y la Ronda del

Milenio

Análisis de las po-

líticas agrícolas de

Europa en el con-

texto de la Ronda

del Milenio

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de revista Treer, D.

The China-OECD

trade divide: buil-

ding bridges

2019 Reino Unido

La brecha comer-

cial entre China y

la OCDE: constru-

yendo puentes

Análisis de la bre-

cha comercial entre

China y la OCDE y

propuestas para

construir puentes

Web of Science

Cordero, S., & Pinos, L.

212

Tipo de

fuente Autor Codicación de

las fuentes

Año de

publicación

País de

origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Informe

Van Heuvelen,

E., & Fondo Mo-

netario Interna-

cional

Subsidy Wars:

Cooperation and

common unders-

tanding could

dial back trade

tensions

2023 Internacional

Guerras de subsi-

dios: La coopera-

ción y el enten-

dimiento común

podrían reducir las

tensiones comer-

ciales

Análisis de cómo

la cooperación y

el entendimiento

común podrían

reducir las tensio-

nes comerciales

en las guerras de

subsidios

N/A

Artículo

de revista

Wang, R., & Po-

pova, L.

International

trade disputes

related to sh

products and

Agreement on Fi-

sheries Subsidies:

Key regulatory

issues and litiga-

tion outlook

2023 Reino Unido

Disputas comer-

ciales interna-

cionales rela-

cionadas con

productos pes-

queros y el Acuer-

do sobre Subven-

ciones Pesqueras:

Principales cues-

tiones regulatorias

y perspectivas de

litigio

Análisis de disputas

comerciales inter-

nacionales sobre

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ros y cuestiones

regulatorias clave

del Acuerdo sobre

Subvenciones Pes-

queras

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de revista

Wang, X., Li, D., &

Yu, Y.

Current Situation

and Optimization

Countermeasures

of Cotton Subsidy

in China Based on

WTO Rules

2022 Suiza

Situación actual

y contramedidas

de optimización

del subsidio al

algodón en China

basadas en las

reglas de la OMC

Análisis de la

situación actual

y propuestas de

optimización para

los subsidios al

algodón en China,

basado en las re-

glas de la OMC

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The Dark Side of

China's Economic

Rise

2017 Reino Unido

El lado oscuro del

ascenso económi-

co de China

Examen crítico del

ascenso econó-

mico de China y

sus implicaciones

globales

Web of Science

DICERE Revista de Derecho y Estudios Internacionales

Vol. 1 N° 02 / Junio - Noviembre 2024 / e-ISSN: 3028-886X 213

Tipo de

fuente Autor Codicación de

las fuentes

Año de

publicación

País de

origen

Contenido teórico

general

Contenido teórico

especíco

Base de

datos

Artículo

de revista

Xiang, H., &

Kuang, Y.

Who benets

from China's coal

subsidy policies?

A computable

partial equilibrium

analysis

2019 Países Bajos

Análisis de quién

se benecia de

las políticas de

subsidio al carbón

en China

Análisis de equili-

brio parcial compu-

table para determi-

nar los beneciarios

de las políticas de

subsidio al carbón

en China

Science Direct

ResearchGate has not been able to resolve any citations for this publication.

Systemic Changes in the Politicization of the International Trade Relations and the Decline of the Multilateral Trading System

Article

Full-text available

Mar 2023

This Article contributes to the discussion about the development of international trade regulation of state interventionism by situating the tensions that exist about the future design of subsidies and state enterprises treaty regulation in the broader context of current systemic challenges to the multilateral trading system. While recent studies have explored the issues of subsidies and state-owned enterprises (SOEs) as one of the most significant in impact among the contemporary challenges to the WTO, there is certainly scope to discuss further such a problem from the broader point of view of the crisis of the multilateral trading system, its systemic challenges and the concomitant increasing politicization of international trade relations. To this end, this Article analyzes the interactions between the lasting decline of the WTO, growing political interferences with international trade flows and the prospects of reforming multilateral trade rules to address its systemic challenges and manage/mitigate newly central problems of the 21 st century such as the Covid-19 Pandemic, climate change and the greening of economic production and international trade. The Article argues that existing WTO rules are not adequate to address these challenges and problems. It concludes that, like in the GATT era, it is only the spirit of pragmatism that may provide chances to find alternatives to growing frustration with negotiating inaction and, hence, to reform the system. However, the question remains whether it is possible to find an approach to imagine, remodel and craft multilateral rules that are sensitive to different economic, political, and social choices and able to rebalance the position of all members, large and small, rich and poor.

Disciplining Subsidies Through Free Trade Agreements (FTAs): Emerging Developments in Japan’s FTAs and Their Implications

Article

Full-text available

Mar 2023

Aya Iino

The international economic order is undergoing significant change. Most recently, key countries have been seeking to increase their level of economic security, including through increased industrial subsidies. Regulating subsidies is controversial, but undisciplined subsidy payments could be harmful for the healthy functioning of markets and balanced development among nations. In this regard, the GATT-WTO has regulated subsidies, but it has not been fully functional in recent years, and reform efforts do not appear to be bearing fruit soon. Therefore, in parallel with WTO reform efforts, reliance on other approaches, such as discipline through free trade agreements (FTAs), should be considered. Disciplining subsidies through FTAs is inherently difficult, given the cross-border nature of subsidies on the one hand and the geographical limitations of the FTA’s scope of application on the other. In recent years, however, such disciplines in FTAs have begun to appear, starting with EU FTAs. Thus, this article explores the possibilities and limitations of the discipline of subsidies through FTAs, using Japan’s FTAs as a case study, to approach the path to international control of subsidies. Accordingly, this article first reviews the range of related issues and developments, including characteristics of subsidies, the rationale for subsidy discipline in trade agreements, recent challenges to multilateral subsidy discipline, the current status of subsidy discipline through FTAs, and the background of subsidy discipline in EU FTAs. The article then identifies the WTO-plus elements that are distinct to subsidy disciplines in EU FTAs and discusses their implications. Through these, it highlights the perspectives needed when considering subsidy discipline through FTAs, examines Japan’s FTAs in light of these perspectives, and presents the findings and implications thereof. Considerations are given to Japan’s FTA/trade policy as a background for its subsidy discipline through FTAs, the current status and characteristics of subsidy disciplines in Japan’s FTAs, the Agreement Between the European Union and Japan for an Economic Partnership’s (JPN-EU) subsidy-related provisions as drastic change, the effects on the Asia-Pacific region, and future prospects.

The Covid 19 Exogenous Shock and the Crafting of New Multilateral Trade Rules on Subsidies and State Enterprises in the Post-Pandemic World

Article

Full-text available

Mar 2023

Leonardo S. Borlini

This Article discusses existing WTO rules on subsidies and state enterprises, relevant caselaw and reform prospects in light of key geopolitical developments and changes in the global economy emerging in the aftermath of the Covid-19 pandemic. Following a general introduction, the Article critically analyzes present WTO rules on industrial subsidies, focusing inter alia on the new problems raised by activist industrial policies pursued by global trading powers, foreign subsidization, the climate change shock and environmental exigencies. It then shifts attention to the application of WTO rules on subsidies to the state sector and the increasing demands for new international trade rules on non-subsidies measures to address the negative spillover effects on trade from government influence on state-owned enterprises (SOEs). With respect to each of these matters, the Article first clarifies the terms of the problem in relation to existing WTO rules and caselaw, and next examines the question of how, and to what extent, “deeper” free trade agreements (FTAs)—those that experts designate as models for WTO reforms on the matter—establish new rules that permit to adequately address the trade concerns raised by SOEs’ commercial and financial activities. Based on this multi-layered analysis, the article concludes by examining prospects of reform of WTO rules on state interventionism.

Agreement on Fisheries Subsidies

Article

Full-text available

Jan 2023

At the 12th Ministerial Conference in June 2022, Members of the World Trade Organization ( WTO ) reached a historic Agreement on Fisheries Subsidies that aims to contribute to the United Nations Sustainable Development Goals. This article provides the necessary background to the Agreement, tracing briefly the history to the negotiations. After a general overview of the Agreement, three key provisions of the Agreement are examined, namely, the prohibition of subsidies to (1) illegal, unreported and unregulated fishing, (2) the fishing of overexploited stocks, and (3) fisheries on the high seas outside the competence of regional fisheries management organisations. The provisions of the Agreement on special and differential treatment in favour of developing and least developed countries, as well as notable procedural and institutional features, are also considered. The remaining issues still to be addressed at the WTO are highlighted in the conclusion.

The road ahead and the future of eliminating fisheries subsidies under the WTO

Article

Full-text available

Apr 2022

The World Trade Organization has explored forging an agreement on eliminating trade-distorting fisheries subsides for twenty years. To hasten towards the compromise among WTO Members, the chair of fisheries subsides circulated the revised draft text eyeing on the conclusion of negotiations before its twelfth ministerial conference at the end of 2021. This study analyzes the draft agreement, focusing on prohibition on subsidies concerning illegal, unreported and unregulated fishing, overfished stocks and overcapacity and overfishing. In addition, cross-sectional models are specified to investigate the effects of subsidies. Results show that both direct and indirect payments contribute to catch while support aimed for resource management is largely decoupled from overcapacity. When countries are further divided into the developed and developing countries by the WTO and the HDI criteria, only indirect payments prove their effectiveness in boosting catch. These empirical results shed light on the importance and effectiveness of policy reform in global fisheries subsidies.

WTO Subsidy Disciplines

Article

Full-text available

Mar 2022

Robert Gulotty

Decades of negotiation to extend the GATT/WTO system to address subsidies have never produced the sort of uniform, scheduled rules that apply to tariffs or even services. Instead, WTO members have developed rules to demarcate permissible and impermissible subsidies. In this paper, I argue that the WTO approach is now hampered by shifts in the share of global trade away from geopolitically aligned, wealthy states and the growth of global supply chains. These pressures were magnified by the accession of China, with its centrality to global trade and recurrent geopolitical tensions with the United States. The challenges in facing cooperation over subsidies suggest limits to the ability for a ‘rules based’ approach to handle substantial changes in the global trading system.

Current Situation and Optimization Countermeasures of Cotton Subsidy in China Based on WTO Rules

Article

Full-text available

Aug 2022

Cotton plays an important role in China’s agricultural production structure and international trade; therefore, China has implemented a variety of cotton subsidy policies. Since China joined the WTO in 2001, WTO rules have become substantive constraints on its agricultural subsidy policy. Therefore, in order to prevent appeal cases of China’s cotton subsidy, in this article, we investigate the current situation and optimization countermeasures with respect to China’s cotton subsidies based on WTO rules. According to calculation of the level of China’s cotton subsidy support under WTO rules, it currently exceeds 8.5% of the cotton production value. Secondly, we estimate the change in cotton subsidy effect when the support level of China’s cotton subsidy policy is directly reduced to 8.5%; the results show that such a reduction would have a considerable impact on the production scale. However, due to the constraints of the political and economic goals of cotton subsidies, the Chinese government can only “box shift” subsidies by changing the subsidy method and object in order to comply with WTO rules. Finally, from the perspective of how to use cotton subsidies to improve the efficiency of production factors, the Chinese government should focus on optimizing the cotton subsidy policy according to three aspects: improving the Amber Box subsidies, expanding the Green Box subsidies and increasing the Blue Box subsidies so as to maintain the existing level of cotton subsidy support.

International trade disputes related to fish products and Agreement on Fisheries Subsidies: Key regulatory issues and litigation outlook

Article

Sep 2023

Fish-related trade disputes dealt with by the World Trade Organization (WTO) arise from the complexity of the fisheries industry, and the transboundary nature of fish, combined with differing national policies and interests. The Agreement on Fisheries Subsidies (AFS) aims to strengthen the role of the WTO in regulating the fish trade and curbing unsustainable fishing practices such as illegal fishing, overcapacity, and overfishing by limiting excessive fisheries subsidies. This article reveals the legal framework of the WTO to regulate the fish trade and resolve trade disputes and outlines the prospects for fish trade in light of the Agreement on Fisheries Subsidies (AFS). It has been established that general principles, quantitative restrictions, and anti-dumping measures, rather than subsidies, are the most common legal issues in trade disputes on fish products. Technical trade barriers, sanitary and phytosanitary measures, and general national exemptions are also frequent sources of disputes in the fish trade. These measures, designed for safety, health, and environmental reasons, are increasingly used for protectionist purposes by creating trade barriers. The AFS expands the legal framework for resolving trade disputes in the field of fish trade after its ratification. However, this recent international regulation combined with climate change and tightening food standards, is expected to lead to more disputes with developing countries over the fish trade.

Reforming WTO Subsidy Rules: Past Experiences and Prospects

Article

Dec 2020
J World Trade

Subsidies are a critical instrument in the toolbox that national governments use to address market failures and achieve a variety of policy goals. However, critics often arise to point out the inefficiencies and economic distortions that subsidies create, which raise the question of whether the existing WTO subsidy rules are adequate, and how to reshape WTO subsidy rules to address new emerging concerns especially in a global value-chain world. This article first reviews WTO Members’ subsidy-related proposals under the Doha Development Agenda and then addresses key concerns on subsidy rules in the current broader discussion of the WTO reform, trying to figure out feasible approaches toward shaping a ‘new generation’ of subsidy rules under the aegis of the WTO.

The WTO in Crisis: Closing the Gap between Conversation and Action or Shutting Down the Conversation?

Article

Mar 2022

Patrick Low

The multilateral trading system faces numerous challenges that are more profound than at any time in its seven-decade history. It has become commonplace to ask whether the system is in terminal decline. More than a dozen issues facing the WTO are identified in the paper, eight of which are defined as systemic. That is because they permeate and debilitate multiple facets of the workings of the WTO, including the capacity to negotiate, enforce disciplines, monitor policies, and ensure transparency. In no prioritized order, systemic issues arise in the areas of dispute settlement, development, decision-making, transparency, relations between states and markets, subsidies, emerging issues including climate change and digitalization, and trade and health. Other outstanding issues may not be as pervasive in impact, but can nevertheless undermine WTO relevance and effectiveness. All WTO members stand to lose in the absence of predictable multilateral trade rules that pre-commit parties to certain policies and processes. But in today's world, full convergence of all trade rules is a pipe dream. The system needs to balance convergence with managed divergence. Does the non-discrimination principle need to be layered by prior agreement in ways that ensure mutual gains from exchange?

Subsidies in the WTO Framework: Types, Effects and Discussion of International Multilateral TransparencySubvenciones en el marco de la OMC: Tipos, Efectos y Discusión de la Transparencia Multilateral Internacional

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